WGU C213 Accounting for Decision Makers exam Already Passed!!

What does accounting focus on? - Answer-The impact a business's activities have on it's overall financial performance Which report summarizes cash collections and cash expenditures from operating, investing, and financing activities over a period of time? - Answer-Statement of cash flows Which users would have a primary concern with an organization's ability to provide healthcare benefits? - Answer-Employees Which benefit does a corporation gain by following Generally Accepted Accounting Principals (GAAP)? - Answer-An increase in its comparability to other companies Which body regulates a certified public accounting firm's audit practices when the firm is auditing a large publicly traded company? - Answer-The FASB What has had the most significant impact on accounting practices? - Answer-Information Technology What two items of information are revealed on the balance sheet? - Answer-Debt, Ownership Which term is defined as the residual interest in the net assets of a company? - Answer-Owner's equity A corporation has total liabilities of $300 million, total owner's equity of $100 million, and current assets of $50 million. What is the value of the firm's long-term assets? - Answer-$350 million Which situation should result in revenue recognition on the income statement for the year ending 12/31/14 if the firm is using accrual-basis accounting? - Answer-In 2014, a company provides services to a customer for which cash will be collected the next year (2015) Which category on the statement of cash flows summarizes cash receipts and payments to owners and creditors of the company? - Answer-Cash flows from financing activitiesWhere would an investor find a summary of a company's significant accounting policies? - Answer-In the notes to the financial statements What does it mean if a company has a debt ratio of 101.5%? - Answer-The company has 1.5% more total liabilities that total assets Which assurances does an external audit report provide for its readers? - Answer-The company's financial statements fairly reflects its financial position What is consistent with a continual decline in gross profit if the firm's cost of goods sold remains the same? - Answer-Continual decrease in sales Which formula yields a cash time interest earned ratio of 11? - Answer-Cash before interest and taxes of $11,000/cash paid for interest of $1,000 Which form of debt should be reported in the long-term liability category? - Answer-Notes payable expected to be paid in 18 months Which two values affect the measurement of net income? - Answer-Dividend paid, operating expenses Which two items subtotals are included in a multi-step income statement? - Answer-gross profit, income from operations A furniture company using accrual accounting purchased 20 sofas in November 2011, In December 2011, 8 of the sofas were sold to customers. The customers all signed contracts agreeing to pay half the amount owed in February 2012 and the remaining half in March 2012. At the time of sale, the company was reasonably sure the customers would pay the amount owed. In which month should advertising costs be expended? - Answer-November 2011 On May 1, 2011, a company using accural accounting purchased equipment costing $500,000. It expects the equipment to have a useful life of five years. At the time of purchase, the company also purchased a one-year insurance policy on this equipment, which cost $6,000.How much insurance expense should the company have recognized of the year ending in 2011? - Answer-$4,000